Lay Down the Law
A new bill aims to shoot down frivolous lawsuits.
By Jane Easter Bahls •
Opinions expressed by Entrepreneur contributors are their own.
Business owners afraid of losing big in a lawsuit should feel safer: A bill passed by the U.S. House of Representatives in September takes aim at nuisance lawsuits and class-action suits. At press time, the Lawsuit Abuse Reduction Act of 2004 (LARA), H.R. 4571, was awaiting action by the Senate Judiciary Committee.
Lawsuits in the United States are subject to the Federal Rules of Civil Procedure, which dictate who is responsible for what, how a lawsuit is to proceed, and what lawyers may do. LARA gives teeth to Rule 11, designed to stave off frivolous lawsuits. Under LARA, a lawyer who files a groundless lawsuit or presents a pleading or motion with the intent of harassing or causing unnecessary delay faces sanctions.
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